How to price a course: A simple pricing guide
Editor's note: This post was originally published in Jan 2024 but has been updated as of the new publish date.
It can be difficult to put a price on a learning opportunity. You want your classes to be accessible to as many students as possible, but it's also important to signal to students the value of your offerings—and pricing plays a key role here.
To find the right price for your classes and camps, you’ll need to balance the operational and logistical needs of your program with the goals of your mission and the expectations of potential students.
A step-by-step approach can help you find that balance. This 3-step guide shows you how to price a course whether your classes are online or in-person, nonprofit or for-profit. We even offer a handy downloadable price calculator to put some real numbers on the factors that impact pricing.
3 Steps to price a course
Leading programs don’t just copy the pricing structure of the program down the street. They consider the unique needs of their program and its students. That’s why course pricing has a reputation as being a difficult task to accomplish.
To make class pricing simpler, we’ve broken the process down into three steps:
- Calculate overhead plus desired profit margin
- Assess comparable courses already in the market
- Consider the value the class offers learners
These steps apply to every type of class or organization. They cover the factors with the most impact, so nonprofit arts education programs and for-profit colleges can benefit equally from this simple approach to class pricing. We’ll cover some special considerations after we walk through the basic process.
Step 1: Calculate your overhead plus desired profit margin
Class pricing starts with figuring out your expenses. This includes some obvious things like the cost of materials, but also more nebulous factors like marketing and administrative overhead. Don’t forget to include the cost of class registration software and other essential tools.
Start by calculating the total cost of class materials and adding that to instructor pay. Then include a percentage of your:
- Facilities and utilities costs
- Marketing budget
- Administration overhead
- Cost of class registration software and other tools
The percentage you use depends on the number of courses you offer and how much of your organization is dedicated to education. If your program offers just one six-week summer camp at a dedicated facility, you’ll use 100% of these costs in your calculation. For programs with multiple classes or shared facilities, you’ll only include the percentage relevant to that class.
Take the total of all of these expenses and divide by the number of learners you expect to register for the class. This number represents the absolute minimum you can charge and still break even.
Finally, if your organization is for-profit, add in the profit margin you would like to make on the class. Most organizations aim for between 5% and 20% of the total cost per student.
To make these calculations a little easier, you can modify our customizable Class Pricing Guide Calculator with the details relevant to your courses.
Keep in mind that number you get from the pricing guide calculator is just a starting point. There are other factors to consider before setting a final course price.
Step 2: Assess comparable courses already in the market
If your price is much higher than others in your area, learners may not register. If it’s too much lower, they may worry that your class isn’t valuable. You'll want to do some research into organizations offering similar classes to see what they charge.
Comparing your class to others in your niche and in your area helps you understand where you fit in the market. Look for courses that are as similar to your class as possible.
A perfect match would be:
- In the same subject
- Offered in your city or area
- Serving the same population
- Offered in the same format
- With the same class size
You may not be able to find a perfect match. That can actually be a good thing because it may mean you have an opportunity to fill a unique need and desire in your community.
If you can’t find a perfect match for comparison, look for classes in related subjects, other formats, or serving a different population.
Note how the comparison class differs from yours and how that might affect the price. For example, in-person classes tend to be more expensive than online classes.
Once you have this information, you can use it to adjust your base price to better match the market in your area. It’s okay to price your class a little higher if you have the value to back it up, which brings us to step 3.
Step 3: Consider the value your class offers learners
When we say "value", we're referring to the unique benefit that students get from each of your classes. People tend to see price as an indicator of value. A lower price can sometimes make a class seem less attractive because it may signal to learners that the class isn’t all that valuable. A higher pricing can do the opposite. That’s why considering value is the third step in pricing a course.
Evaluating value can be a bit ambiguous and variable but, in general, you want to consider:
- What skills students will learn
- What type of experience students will have: A beautiful studio space? Snacks and drinks?
- Whether the class saves them time or money
- If the class makes them more employable by giving them a certificate or credential
- How the class can change their daily life
- What might happen if they don't take the class
- Other ways they could learn this skill or gain this knowledge
A few other factors can affect value, including the number of students per class. Smaller class sizes generally equal higher value because students get more one-on-one instruction.
Instructor reputation can also play a role. For example, students may be willing to pay more to take a writing class from an award-winning author.
Even the uniqueness of your class can contribute to its value. If yours is the only wooden boat building class for miles, students may be willing to pay a premium for it.
Pricing your courses to fit special circumstances
If you’ve followed the three steps above, you should have a ballpark idea of what your pricing should be. If your organization is a nonprofit, offering online classes, or wants to attract more students, read on for extra guidance.
Special course pricing considerations for nonprofit organizations
Nonprofit organizations may not be offering classes with the goal of making a profit. They may be able to price below the base cost of offering the class if they have grants or other sources of funding.
If classes are core to your nonprofit’s mission, you may want to make some classes free or charge a nominal fee. For example, an art museum with the goal of making the arts accessible to all may offer free or very low cost watercolor classes.
On the other hand, some nonprofits offer classes as a fundraising tool to help support other functions more essential to their mission. A historical preservation society may offer classes in woodworking as a way to support their mission of preserving a historical site. In that case, the organization may want to set their class prices well above the base cost.
Pricing and marketing online classes
Whether a class is online or in-person can impact the perceived value. Online classes may face more competition, since students have access to sites like Coursera, EdX and even YouTube. You may need to match online prices, or make an extra effort to prove why yours are more valuable than large-scale offerings.
One way to show value is by marketing to students in your local area. Lean in to the idea that they're supporting a community nonprofit or small business. If you have an office where they can call or walk in for support, that’s even better.
Use special pricing to attract more students
In some cases, low cost or even free classes can pay off for your program. They can encourage people to try your classes in hopes that they’ll like it so much they’ll return again and again. Many dance, fitness, and yoga studios do this.
If you choose to offer a loss leader class, pick it carefully. It should be an introductory level course that accurately represents what your program offers. You might even create a special survey or intro course for this purpose.
Don’t forget a yearly pricing review!
Class pricing isn't "set it and forget it". The cost of materials, utilities and labor will shift over time. So does the perceived value of various classes and skills. Schedule a yearly pricing review to make sure your classes are still well-priced for the market and matched to the class value.
If you think it might be time to raise your prices, we have a guide for that too. Learn how you can raise prices without upsetting students.
